Taking out life insurance can meet several financial objectives: investing money for the long term, obtaining additional income for retirement, preparing an estate to protect loved ones, etc. Life insurance has many advantages!
Life Insurance: a Formula for Savings
You can consider life insurance as a long-term investment vehicle .
Life insurance allows:
- to gradually build up capital , via regular payments ;
- to grow the savings already built up in an advantageous tax framework .
However, it should be borne in mind that on certain life insurance contracts ( unit-linked life insurance ), the capital paid in by the member is subject to fluctuations in the financial markets, both upwards and downwards; there is therefore a risk of capital loss and, consequently, of non-valuation of the savings.
Life Insurance: a Formula for Retirement
Life insurance is also a preferred investment vehicle if you are looking for a source of additional income , particularly for your retirement. Two solutions are available to you.
Rather than recovering the savings from your life insurance in the form of capital, you can opt for the payment of a life annuity and guarantee you regular income until the end of your life.
Most insurers also allow you to set up scheduled redemptions (which consist of withdrawing part of your savings with amounts and a frequency fixed in advance) so as to ensure the payment of regular income, as with a annuity, but until the capital is extinguished.
Life Insurance: Preparing Your Estate to Protect Your Loved Ones
Life and estate insurance : a preferred tool.
Indeed, by investing part of your savings in a life insurance policy , you can:
- pass on capital to your loved ones under advantageous tax conditions ,
- “advantage” some of your heirs to protect them financially,
- or protect a person who is not destined to inherit from you.
It all depends on your family situation and your goals.
Life Insurance, if You Are Married
Thanks to the subscription of a life insurance contract for the benefit of your spouse, this one will receive, at your death, the capital of the life insurance in addition to his share in the succession, while benefiting from advantageous taxation.
Life Insurance, if You Are in a Civil Partnership or Cohabiting
Partners linked by a PACS are not heirs of each other (the same applies to cohabitants). This means that your spouse or PACS partner has no rights in your estate .
Apart from the will, the way to pass on part of your assets to your PACS partner or cohabiting partner is to take out a life insurance policy for their benefit . By designating him as the beneficiary of your life insurance, you will be able to transfer capital to him (within certain limits, however).
Life Insurance, if You Have Grandchildren
Your grandchildren are not destined to inherit from you as long as their father or mother (your son or your daughter) is still alive.
If you write a will in their favour, what you leave to them will be subject to inheritance tax.
On the other hand, if you designate them as beneficiaries of your life insurance contract , this can allow you to Leave Them Capital Tax-free (below a certain amount, no tax will be deducted).
It is possible to take out a life insurance policy in the name of your minor child . The contract may be accompanied by a clause specifying that the sums saved will only be available when the child comes of age. He will thus be able to have capital to start in life.